The British Property Federation (BPF) is urging the next government to attract investment into the build-to-rent sector, highlighting the need for 30,000 new build-to-rent homes each year to address the severe shortage of affordable properties.
The housing shortage and its impacts
The BPF estimates that 3.7 million people are affected by overcrowding, with an additional 1.2 million on council waiting lists. The federation is calling on the government to unlock private capital to alleviate this acute under-supply of homes.
Currently, there are over 100,000 completed build-to-rent (BTR) homes, with a further 160,000 in the pipeline. Despite this progress, the UK still lags behind countries such as the US and Australia in the development of build-to-rent properties.
Proposed solutions
The BPF suggests that a stamp duty exemption for new developments of more than 100 units would encourage growth in the sector. They forecast that £6.5 billion of private capital is targeting the sector, which could support the delivery of 50,000 units per year.
Ian Fletcher, Policy Director at the BPF, emphasised the need for a broad approach to building more homes: “The only way to tackle the housing emergency is to build more homes of all types and by delivering more affordable housing, market rental homes, student accommodation, and older people’s housing we can relieve the pressure on overall housing supply.”
The role of institutional investment
Fletcher highlighted the importance of attracting pension funds and other sources of institutional capital: “Development across these sectors is currently restricted to 35,000 homes a year, when there is a need for at least 100,000. Pension funds and other sources of institutional capital are attracted to these sectors as they offer secure long-term income, but the next government must do more to give them the confidence to invest.”
A call to action for the government
The BPF’s call for 30,000 build-to-rent homes annually underscores the urgent need for government intervention and private investment to tackle the UK’s housing crisis. As the nation grapples with overcrowding and long waiting lists for affordable housing, it is crucial for the next government to implement policies that will stimulate the build-to-rent sector and ensure a steady supply of diverse housing options. For landlords, these developments could present new opportunities in a more dynamic and supportive market. It remains to be seen whether the government will take the necessary steps to transform these recommendations into reality, providing much-needed relief to renters and boosting the overall housing market.
